Why AI Infrastructure Still Offers Massive Growth—And Why Smart Money Is Already Positioned

The race to build artificial intelligence computing infrastructure is far from over. In fact, we’re only in the early innings of what’s expected to be a multi-year buildout. One piece of evidence? Major investors are doubling down on Nvidia (NASDAQ: NVDA) stock, the dominant provider of the graphics processing units (GPUs) that power this expansion.

The Real Story Behind Nvidia’s Valuation

At 24 times forward earnings, Nvidia might seem expensive compared to the broader market. But placed against peers like Apple (trading at 30x forward earnings) and Alphabet (28x), the chip giant looks reasonably priced—especially when you consider what’s coming.

The company’s GPUs remain the gold standard for AI computing, and the demand is staggering. During its recent quarterly earnings call, CEO Jensen Huang confirmed the company is essentially “sold out” of cloud GPUs. This isn’t a sign of weakness; it reflects insatiable demand from hyperscalers willing to spend every dollar of cash flow—and then some—to secure computing capacity.

Data center capital expenditure is projected to reach between $3 trillion and $4 trillion annually by 2030, up from roughly $600 billion expected for 2025. That’s a 5x-6x expansion over five years, and Nvidia is positioned to capture a massive share of that growth.

Inside the Fund Manager’s Playbook

The movement of major hedge fund managers often signals where institutional money sees opportunity. Consider David Tepper’s Appaloosa Management: at the start of 2025, the fund held 300,000 shares of Nvidia. By the end of the third quarter, that position had swelled to 1.9 million shares—a more than sixfold increase that now ranks as the fund’s fourth-largest holding.

That’s not casual accumulation. It’s a deliberate bet on the thesis that AI infrastructure demand will sustain for years, driving substantial revenue and earnings growth.

Why the Recent Pullback Matters

Nvidia’s stock has recently pulled back roughly 10% from all-time highs—nothing catastrophic, but enough to create a window for investors. With the GPU market still supply-constrained and the global AI buildout accelerating, this dip could represent genuine value.

The reality is that while some headlines suggest companies are diversifying away from Nvidia chips, the truth is more nuanced: the company simply can’t meet current demand. Alternative suppliers are stepping in not because they’re preferred, but because they’re available. As Nvidia ramps production, its share of compute spending should expand further.

The Takeaway

Tracking institutional moves isn’t about blindly copying trades—it’s about confirming your thesis. When someone like Tepper significantly increases exposure to Nvidia during a period of market uncertainty, it’s worth asking why. The answer: the AI infrastructure story isn’t slowing down, and Nvidia remains the primary beneficiary. For investors positioned heading into 2026, that’s an important signal to consider.